Arla revenue up after period of ‘rare stability’ in dairy market

Arla saw its revenue grow 2% in the first half of the year compared with the same period in 2018 as it benefitted from “rare stability in the otherwise volatile global dairy market”.

In the six months to the end of June, the Denmark-headquartered cooperative recorded revenue of €5.2 billion, driven by higher strategic branded sales volumes and an increase in sales prices. The business delivered a net profit share of 2.3%, up from last half year’s profit share of 2.2%.

Arla divides its business into two commercial zones, Europe and International. Retail and foodservice sales in Europe declined 1.5%, mainly due to the strategic decision to step out of selected loss-making private label contracts and the negative currency development of the Swedish krona.

However, the European zone delivered a branded volume growth of 2.3%, driven by product categories such as Lactofree and milk-based beverages under the Arla brand.

It is expected the formal takeover of the Kraft branded cheese business from Mondeléz International will have “great strategic importance for the international zone going forward”.

“The rare stability in the global dairy market has allowed Arla to build on the momentum we created in 2018,” said Arla Foods CEO Peder Tuborgh. “We have strengthened our competitiveness relative to our peers and improved our profitability while launching our ambitious climate goal to become carbon net-zero by 2050.

“We are focused on delivering on our ambitious targets for 2019 while remaining alert and prepared for the continued uncertainties around Brexit.”

Arla said it expects to post full-year revenue between €10.2 billion and €10.6 billion but stressed that a potential no-deal Brexit could negatively impact the outlook.

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